The Real Costs of Keeping a Toxic Employee

Will Yakowicz is a staff writer for Inc. magazine. He has reported from the West Bank and Moscow for Tablet Magazine; covered business, crime, and local politics for The Brooklyn Paper; and was the editor of Park Slope Patch. He lives in Brooklyn, New York.

You know the type. They can't work with others. They're negative, volatile, and often disruptive. Some people call these toxic employees "bad apples."

Another way to think of them? "Hurricane" employees--because the damage they cause extends far beyond themselves.

Michelle K. Duffy, a professor at the Carlson School of Management at the University of Minnesota, says that hurricane employees can affect each organization differently. But, in general, they have the ability to "destroy the social fabric of the organization by creating friction, drama, tension, and hostility among other employees," Duffy told the blog Knowledge@Wharton. "Hurricanes damage not only the people in the network, but also the ties among them."

Below, check out four ways a category 5 employee can wreak havoc in your company:

Contaminate the group.

Sigal Barsade, a Wharton management professor who has spent two decades researching the intersection between work and emotions, says that the cliche one bad apple will spoil the bunch is true. In her paper titled "The Ripple Effect: Emotional Contagion and Its Influence on Group Behavior," she discusses the idea of emotional contagion, and how one toxic employee will infect the entire team. An office "could unknowingly be affected by a particular negative group member... who causes the entire group to feel apprehensive, angry, or dejected, leading to possible morale and cohesion problems, unrealistic cautiousness, or the tendency to disregard creative ideas," she writes.

Hurt the team's performance.

Knowledge@Wharton cites another study, "How, When, And Why Bad Apples Spoil the Barrel: Negative Group Members and Dysfunctional Groups," by Will Felps, Terence R. Mitchell, and Eliza Byington, which found that one negative team member "can have [a] powerful, detrimental influence on teammates and groups." The damage is not only a contagious attitude, but manifests in team performance. Felps, who is a professor at Rotterdam School of Management, says their study found that a single negative employee can literally cause a 30 to 40 percent drop in a team's overall performance.

Discredit the leader.

Jeff Klein, the executive director of the Wharton Leadership Program, says the unconfined presence of a hurricane employee will eventually hurt the leader's reputation. Keeping an employee who is "just not getting with the program threatens the leader's credibility and authority," Klein says. As a leader, your job is to make sure nothing is getting in the way of your employees's ability to work. "Ultimately, one of the things a group looks for in a leader is stability around how that group is going to function. If a leader is not holding everyone to the same standard, that will erode employee loyalty," Klein says.

Cost the company money.

The cost of employing a hurricane is not only measured in emotional impact and performance; they can cost your company money too. Duffy says that leaders may not realize it at first, for the cost may not be obvious. Even if the hurricane is your top performer and brings in more money than anyone else, the toll can be a hefty sum. "They can be quite damaging to the bottom line through lost work hours, people avoiding the hurricane, talking about the hurricane, being worried about dealing with the hurricane, witnessing others harmed by the hurricane and so forth," Duffy says.